Investors are responding warmly to Playtech’s (PTEC) dividend news, despite half year reported net profit declining 42% to €48.8 million. The shares advance 3.4% to 930.5p.
At constant currency rates, reported net profit is 84% higher year-on-year. That implies underlying trading is very good at the business.
The gambling software development firm has increased its dividend by 15% from 9.6c in the first half of 2015 to 11c in the six months to 30 June. A 46c special dividend is also planned for December.
Total revenue is up 18% from €286 million to €337.7 million as a result of a good contribution from licensees and a strong performance from structured agreements.
In addition, revenues from mobile have risen to nearly a third over the period, with more than 50% of UK revenues generated from mobile platforms.
Investec has upgraded its earnings before interest, tax, depreciation and amortisation (EBITDA) forecast by 5%-6%. The broker attributes this to upgrade to the benefits from Playtech's cost-cutting measures and operational gearing, noting that currency headwinds are estimated to increase later this year.
Canaccord has a ‘buy’ rating, saying that trading remains strong into the second half with gaming revenue up and expectations of future benefits from the €138 million acquisition of Best Gaming Technology in July 2016.
Best Gaming Technology is a Vienna-based provider of sports betting software and solutions with clients including Betfred, Paddy Power Betfair (PPB) and William Hill (WMH).
